The U.S. Department of Justice will not reopen its criminal investigation into former Federal Reserve Chair Jerome Powell, Attorney General Todd Blanche said in an exclusive interview with Bloomberg on Oct. 2 Eastern Time.
「We will not reopen the criminal investigation into him.」 Blanche said, referring to Powell. He added that he was satisfied with the Federal Reserve inspector general’s findings, while also saying Powell failed to properly oversee the renovation project. In other words, the DOJ is stepping away from criminal prosecution, not from questions over management responsibility.
Inspector general report found no crime, but pointed to management failures
The DOJ’s position followed a Sept. 30 assessment released by the Federal Reserve’s Office of Inspector General. The 120-page report, numbered 2026-FMIC-B-016, reviewed the renovation of the Fed’s Eccles Building and the building at 1951 Constitution Avenue.
The report said: 「During the course of our evaluation, we did not identify a reasonable basis to conclude that a federal criminal violation occurred that should be referred to the Attorney General.」 It also said no administrative misconduct was found.
Still, the report did not portray the project as well managed. It said construction costs climbed from $921 million in February 2020 to $2.018 billion in the 2024 renovation budget, more than doubling over that period. Total project cost reached about $2.4 billion, or roughly $1 billion over budget.
The report said the core problem was oversight. According to its findings, the Board did not effectively manage the construction manager at-risk contract, repeatedly departed from contractual cost-control provisions, and did not establish a guaranteed maximum price mechanism that would have shifted overrun risk to the contractor.
It also said internal project governance was not sufficient for a project of this scale and complexity, and that many of the shortcomings resembled problems seen in the earlier Martin Building renovation. As for marble, water features, and the rooftop garden, which had drawn some of the sharpest outside criticism, the report said those design elements did not materially contribute to the overruns.
How the case moved from congressional accusations to a court rebuke
The dispute began in July 2025, when Republican Representative Anna Paulina Luna accused Powell of perjury over testimony he gave to the Senate in June 2025 about the renovation project and referred the matter to the DOJ for criminal review.
In January 2026, Powell publicly confirmed that the Federal Reserve had received a grand jury subpoena from the DOJ and that he had become the subject of a criminal investigation. He said at the time that he was being targeted because he had refused Trump’s demands for rate cuts.
In March 2026, Chief Judge James Boasberg of the U.S. District Court for the District of Columbia quashed the subpoena. Boasberg said the evidence of improper motive was "so strong" and the justification for the subpoena was "so weak" that it appeared to be merely a "convenient excuse," with the real aim being to pressure Powell into submission. He also said prosecutors refused to provide the court, even under seal, with any actual evidence of a crime.
On April 24, 2026, federal prosecutor Pirro announced on X that the investigation had ended and that the issue of renovation overruns would instead be reviewed by the Fed’s inspector general. Before that, Republican Senator Thom Tillis had warned that if the investigation was not withdrawn, he would block Kevin Warsh’s nomination to lead the Federal Reserve. Opposition to the probe had emerged from both parties.
Blanche left room for future action if new evidence appears
Blanche did not completely close the door on future action. He said whether Powell "did something wrong" or "should be held accountable" is separate from whether any criminal offense took place.
The Federal Reserve is set to hire an independent audit firm to review project costs, and Blanche said the DOJ could still open an investigation if that review uncovers evidence of criminal wrongdoing.
There have also been changes inside the Fed. Kevin Warsh, who took over as chair in May, has brought in the U.S. General Services Administration to lead the next phase of the headquarters renovation and ordered an independent cost audit. The GSA described that arrangement in a news release issued on Oct. 1.
Trump called for Powell to leave the Fed Board
On the afternoon the inspector general’s report was released, Trump posted on Truth Social that Powell should at least be forced to resign from the Federal Reserve Board.
Trump wrote: 「If he does not resign, then the U.S. government at the highest level should sue, on grounds of either corruption or incompetence, both of which are totally unacceptable.」
The DOJ has now made clear that it will not revive the criminal case. Even so, the dispute over renovation overruns, management responsibility, and the outcome of the independent audit remains unresolved.